Warren Buffett Recalls His Early Days As An Investor | February 26, 2018 | Summary and Q&A

Summary

In this interview, Warren Buffett discusses the history of the Berkshire Hathaway annual meeting, the types of questions he receives from shareholders, and the reasons behind his passion for teaching. He highlights the family atmosphere at Berkshire Hathaway and his connection to the shareholders. Buffett also talks about the evolution of the annual meeting and the growing number of attendees. He shares his thoughts on why people are attracted to his advice and the style of his shareholder letters. Buffett reflects on the changes in his life as he became more well-known and the challenges of dealing with commercialization of his name.

Questions & Answers

Q: How did the annual meeting of Berkshire Hathaway begin?

The first annual meeting was held in New Bedford, Massachusetts when the company was still a Massachusetts corporation. Initially, only a few required officers would attend, and then the meeting was moved to the lunchroom at National Indemnity in Omaha. At that time, only about a dozen people, including Buffett's relatives and a few out-of-town visitors, would attend.

Q: When did the annual meeting start to grow in size?

The annual meeting started to grow after Berkshire Hathaway merged with Blue Chip in 1982. That meeting had around 100 attendees, and the venues continued to enlarge as the years went by. The meeting is now webcasted, and the attendance has stabilized.

Q: Why are the questions at Berkshire Hathaway's annual meeting different from those at other shareholder meetings?

Buffett believes that there is a more familial atmosphere at Berkshire Hathaway compared to other large corporations. Shareholders have a connection to Berkshire Hathaway, and Buffett and Charlie Munger have a partnership-like relationship with them. This connection encourages shareholders to ask more personal and substantive questions.

Q: Why does Buffett enjoy teaching and being a teacher?

Buffett believes that he has learned a lot from other teachers and enjoys sharing his knowledge and experiences. He finds it rewarding to talk to young people and help them with personal advice, not just about investments. Buffett appreciates the opportunity to talk to bright individuals who are just starting their lives.

Q: How did the teaching of students and schools list start?

Buffett initially started giving talks to business schools while attending directors' meetings at companies like Coca-Cola and Gillette. Instead of traveling to different schools, Buffett started inviting them to Omaha. The requirement of having a third of the students being women was implemented to create diversity and prevent gender imbalance.

Q: What type of questions do students ask Buffett?

Students ask a wide range of questions, including both investment-related inquiries and questions about life advice. Buffett finds that students are more interested in personal topics, and he tries to provide helpful guidance based on his own experiences.

Q: How did the process of writing the annual shareholder letter begin?

Initially, Buffett wrote the annual report in a similar way to how it had been reported before, but it was reviewed by lawyers at Ropes and Gray. After this, Buffett decided to write the letter in his own unvarnished style, as if he were writing to his sisters. He tries to use language and communicate in a manner that he used with his sisters.

Q: What kind of mail and responses does Buffett receive at his office?

Buffett receives numerous letters from shareholders. He reads and responds to many of these letters, sometimes scribbling a quick response directly on the letter itself. He appreciates the personal, handwritten letters and takes the time to respond to as many as he can.

Q: Has becoming well-known and recognized changed Buffett's life significantly?

While Buffett does get recognized more often now, especially outside of Omaha, he states that it hasn't changed his life that much. He enjoys the recognition and finds that it helps more than it hurts. Buffett values the relationship he has with people in Omaha and appreciates their continued support.

Q: Is there a danger of Buffett becoming mythologized or his words being twisted out of his control?

Buffett acknowledges that there is a danger of his name being used to promote things on the internet, especially outside of the United States. People may commercialize his name to entice others and may create unrealistic expectations regarding returns. Buffett emphasizes that his returns have decreased over time due to working with larger amounts of money and increased competition.

Takeaways

Warren Buffett's annual meeting at Berkshire Hathaway has grown from a small gathering to a significant event with thousands of attendees. The questions asked at the meeting often differ from those asked at other shareholder meetings due to the family-like atmosphere and deep connection Berkshire Hathaway has with its shareholders. Buffett's passion for teaching and sharing his experiences is a result of the knowledge he gained from other teachers and his desire to help young individuals navigate both personal and investment decisions. His annual shareholder letters, written in a personal and unvarnished style, have attracted a loyal following. While Buffett has become more recognized, it hasn't significantly changed his life, and he values his relationship with the people of Omaha. However, there is a risk of his name being commercialized and his words being misconstrued by others.